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Gridworks at AIF 2022: Africa’s role in the global net-zero race

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Gridworks recently spoke at the Africa Investment Forum (AIF) 2022 in Abidjan – the continent’s largest transactional investment marketplace.

Championed by the African Development Bank and its partners, AIF is dedicated to advancing projects to bankable stages, raising capital, and accelerating the financial closure of deals.

One of the key sessions of the Forum was ‘Mobilising Natural Capital – Africa’s Role in The Global Net-Zero Race’, in which Loic Ehua, Gridworks’ Business Development Manager, was a featured panellist.

Loic was joined by fellow panellists Linda Mabhena-Olagunju, Founder and CEO of DLO Energy Resources Group, and Katan Hirachand, Head of Origination and Advisory MENA at Sociéte Générale; and moderator Wole Famurewa, Anchor at CNBC Africa.

During the discussion, the panellists stressed that a just energy transition needs a balance between quickly transitioning to non-carbon energy sources – while ensuring that both electricity use and access rapidly increase across the continent.

Loic discussed what a just transition looks like for Africa – and how to leverage more climate finance to support the development of climate-smart infrastructure across the continent. He also set out why well-run and well-financed electricity transmission infrastructure is essential to support economic growth and the uptake of renewable energy.

During the session, Loic said:

‘’Other continents chasing net zero have large and dense electricity network infrastructure in place and relatively slower demand growth than the African continent, so the real issue for them is displacing existing thermal generation.

“Although Africa’s energy transition has started with an increase in renewables-based electricity generation, there’s a growing recognition that energy access and climate transformation targets won’t be met unless transmission and distribution infrastructure is fit for purpose and able to attract much more investment.

“While electricity generation has attracted billions of dollars of private investment in recent decades, the electricity networks which carry that power to people – have not. And here lies the most immediate gap. We need to make sure that large scale transmission and distribution utilities are eligible for this green/climate investment because generating renewable energy which can’t be efficiently delivered to end users is a pointless exercise.

“Donors and concessional multilateral funding have been available and should continue to be as much as possible. But private sector capital needs to be mobilized to fill the gap. This has been the case in Latin America, India and in the most advanced economies. Only Africa has not benefited from such capital, to tackle the immense challenges ahead.

“Creating an enabling environment, and sensible funding structures to absorb the required level of investment from a variety of different sources is the challenge for Governments, donors, policy makers and investors. This is what it will take to build low carbon economies in Africa that meet the growing energy demand of the population.”

Gridworks see the role of Development Finance Institutions to offer governments private sector solutions to Africa’s electricity funding shortfall to complement the public sector solutions they have at present. We work in a sector where there hasn’t traditionally had an array of private sector opportunities, but Governments are increasingly interested in the role of the private sector in electricity networks.  

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